Govt readies terms of Walmart probe

Dec 22, 2012, 06.57AM ISTTNN[ Sidhartha ]

NEW DELHI: The government's probe against Walmart over its lobbying-related disclosure is expected to include identification of alleged beneficiaries of the payments, a move that is aimed at blunting any opposition to foreign direct investment in multi-brand retail.

Sources familiar with the development told TOI that the basic mandate given to the retired judge, who will investigate the issue is to ascertain if any portion of the lobbying expenses have made their way into India and played a part in influencing the decision on FDI, something that has been on the discussion board for several years but was cleared only three months ago.

Walmart has denied that it tried to influence the decision in India and said the disclosures before the US Senate had nothing to do with political or government contacts within the Indian government. In a statement issued on the day the Parliamentary affairs minister Kamal Nath announced an investigation, the US retail giant said the disclosures were routine submissions mandated under law. But, the protests from the Opposition prompted the government to announce an enquiry days after it got Parliamentary backing to allowing FDI in multi-brand retail. Sources said only if evidence is found that Indian entities or individuals were involved in the alleged lobbying expenses then the other terms of reference that are being finalized would be looked at. They, however, indicated that the government will also look at possible violations of Indian laws, a possible reference to the Prevention of Corruption Act.

The retired judge is expected to be given 30 days to conclude the probe, a move that is seen to be aimed at quickly dealing with the case and ensure that delays are avoided. In recent weeks, Walmart has been at the centre of controversy over possible violations of Indian laws. The Enforcement Directorate is separately being investigating if the company ran foul of the Foreign Exchange Management Act by investing in an Indian entity, Cedar Support, even before foreign direct investment was allowed in the sector.

As reported first by TOI, the enforcement directorate has issued notices to four entities after the Reserve Bank of India referred the case to it. On its part, RBI had received a complaint forwarded by the PMO when CPI's MP Achuthan made allegations of wrongdoing. Separately, Walmart has launched an internal investigation, which includes its Indian operations, to see if it complied with the US anti-bribery laws.